KLCI claws back above 1,600 level as PM assures state of emergency does not entail military coup

TheEdge Tue, Jan 12, 2021 01:02pm - 1 month ago

KUALA LUMPUR (Jan 12): The main index at Bursa Malaysia pared some of its losses after having dropped below the 1,600-point level in the morning session following the reinstatement of the Movement Control Order (MCO) in several states.

The Yang di-Pertuan Agong Al-Sultan Abdullah Ri'ayatuddin Al-Mustafa Billah Shah had today also consented to a proclamation of emergency for a period up to Aug 1, 2021, to contain Covid-19.

The benchmark index pared its losses after Prime Minister Tan Sri Muhyiddin Yassin assured Malaysians that the declaration of state of emergency by the Agong earlier today does not entail a military coup and that the civilian government is still in place.

At 12.30pm, the FBM KLCI was down 11.77 points to 1,605.48. The index had earlier fallen to a low of 1,590.71.

Market breadth, however, remained negative with 513 losers and 270 gainers, while 763 counters traded unchanged. Trading volume was 5.08 billion shares valued at RM3.26 billion.

The top losers included Nestle (M) Bhd, Hong Leong Bank Bhd, Hong Leong Financial Group Bhd, PPB Group Bhd, Panasonic Manufacturing Malaysia Bhd, Public Bank Bhd, Hong Leong Industries Bhd, Kuala Lumpur Kepong Bhd, Petronas Gas Bhd and British American Tobacco (M) Bhd.

The actively traded stocks included Iris Corp Bhd, Hubline Bhd, Lambo Group Bhd, AT Systematization Bhd, Vsolar Group Bhd, Sapura Energy Bhd, Vortex Consolidated Bhd and Bintai Kinden Corp Bhd.

The gainers included Hartalega Holdings Bhd, KESM Industries Bhd, Frontken Corp Bhd, Tasco Bhd, Supermax Corp Bhd, Scientex Bhd and Top Glove Corp Bhd.

Reuters said stocks took a breather on Tuesday, easing from record highs as political turmoil in Washington and rising coronavirus cases gave pause, though a selloff in US Treasuries extended as investors reckon on a big spending government.

The yield on benchmark US government 10-year debt, which rises when prices fall, gained as much as 2.4 basis points to a fresh ten-month high of 1.1580%, it said.

Moody’s Investors Service in its report said its Asia Pacific outlook for sovereign creditworthiness in 2021 is negative overall, reflecting expectations for the fundamental conditions that will drive sovereign credit over the next 12-18 months.

It said the pandemic exacerbates existing social, political tensions, constraining outlook for economic recovery or reform in some cases.

Meanwhile, it said political manoeuvring could hinder the current Malaysian administration in pursuing measures that restore the previous trend of fiscal consolidation, especially regarding politically controversial revenue reform.

“The ruling coalition's ability to call elections and seek a refreshed mandate is further complicated by the recent resurgence of coronavirus infections,” it said.

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